I'm a deputy editor at Forbes, where I cover venture capital and startups and produce Forbes' annual Midas List. Since joining Forbes, I've helped send a bad guy to jail, picked the world’s most powerful people, covered a dispute between a drug company and its unwitting trial subjects, interviewed Dean Kamen and Geoff Canada, persuaded Hugh Hefner, Karl Rove, and Angela Merkel to work with me, and shared a Po-Boy with the world’s biggest tree-cutter. My journalism career began the day I saw my first pitch (ever) land on the front page of Sunday’s Post. I earned my bachelors from Princeton, my masters from Stanford and had a short (but hopefully forgivable) stint as a consultant in between. You can catch my Twitter missives @nicoleperlroth.

In five months, Fab has done what it took Facebook twice as long to do. Granted, Facebook was operating in a constrained–co-eds only–environment for its first two years in existence. The more appropriate benchmark might be close competitors Gilt Groupe, which took 24 months to reach a million members, or One Kings Lane, another flash deal site for design, which took 26 months to hit the milestone.

But what really makes Fab’s momentum compelling is its timing. The young startup has taken off at a time when the daily deals model has started to look déclassé. Facebook and Yelp, which both experimented with daily deals, recently pulled out of the space, after they determined the business model was not sustainable.

Meanwhile, Fab has been adding 5,000 new members a day and has enticed even the pickiest suppliers with a “win-win” business model that guarantees vendors a profit. Unlike Groupon— which requires merchants to significantly discount their offerings on top of a hefty 50% commission— Fab’s model ensures its suppliers don’t lose a dime. The site’s buyers negotiate a price with suppliers up front, often near wholesale but always at profit.

When I sat down with Fab cofounders Jason Goldberg and Bradford Shellhammer in September, their site boasted 600,000 members and they were focused on driving virality. The two were coaxing members into inviting friends with perks like one-time discounts and free shipping and generating buzz with online “pop-up shops” and pictures of fat cats in Fab boxes.

Those tactics seem to have paid off. Just two months later, they’ve nearly doubled their member base. In our interview, Goldberg did not hold back: “We’re crushing it.”

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.